The Aid Scam
ONE OFFICIAL OF THE U.S. AGENCY FOR International Development with long experience in the Eastern Caribbean put it bluntly: "None of these islands is viable. The best way to solve their problems...
...Author's interview, March 1988, St...
...It is unlikely that they could be, since the intentional lowering of incomes is central to structural adjustment strategy: To "succeed," it necessarily causes the immediate worsening of poverty...
...assistance...
...The location of new farm roads and irrigation facilities is also determined by the goal of maximizing export earnings...
...Vincent and the Grenadines...
...The U.S...
...The agricultural import bill of the English-speaking Caribbean alone was about $2 billion in 1988, and the region's trade deficits keep growing...
...Says a senior World Bank economist for Jamaica, "There is no doubt that emigration is an essential part of any development strategy for the region...
...Guyana, the Dominican Republic, Trinidad and Tobago, Barbados and the Wind- ward Islands are all under pressure to "adjust...
...2) relatively equitable distribution of land...
...Largely as a result of adjustment and related policies, at least $50 billion in capital is transferred yearly out of the Third World...
...The U.S...
...But they don't want to do it...
...It is carried out in alliance with the ruling elites of poor nations, many of whom--despite their once-patriotic intentions-have become entrapped in the IMF honey pot...
...The United States still retains the greatest power over global capital and credit flows, and is the dominant member nation of both the IMF and the World Bank, although Japan now nips at its heels...
...We don't have a private sector of our own capable of promoting growth...
...government dictates in the name of freedom are creating increased poverty and, consequently, social chaos and unrest...
...The Caribbean economy can grow, says Christian del Voie, only if Caribbean governments accept "...the need to keep wages low and exchange rates realistic [by devaluing local currencies...
...4. As such, the CGCED may be an ominous precedent for other impoverished countries, particularly those in sub-Saharan Africa, whose weak economies, high levels of non-commercial foreign debt, and lack of political bargaining power may make them subject to similar mechanisms of outside control...
...7 If current versions of structural adjustment do not transform poverty-creating structures and patterns of trade, it is not because these structures cannot be changed...
...In essence, the Agency is advocating greater subsidization of business, especially foreign firms, by Caribbean taxpayers and workers...
...The Caribbean has paid out substantially more than it has received in financial resources since 1986, when an estimated $100 million flowed to foreign lenders.2 Would-be "developing countries" worldwide paid out $187 billion in 1988 just to meet debt obligations.3 Structural adjustment is designed and implemented primarily by the World Bank, the IMF, and other international "development" banks, in close collaboration with wealthy country governments and commercial banks...
...This so-called development strategy steers desperately needed capital, minerals, land, and labor away from production for local needs and toward debt payments and exports...
...According to their theory, this would enable indebted countries to climb the economic hierarchy of nations...
...Real development has to start with people...
...Lucia, and St...
...AID recognizes that the international competitiveness of Caribbean exports is constrained by high production costs and the lack of demand on world markets for the region's traditional exports...
...By depressing wages and living standards and reducing social services, it undermines the well-being and productive capacity upon which the development potential of adjusting" nations depends...
...The Caribbean is the only area of the world, thus far, where adjustment programs are being orchestrated by a regional body the Caribbean Group for Cooperation in Economic Development (CGCED) led by the IMF and the World Bank, and including more than 30 government and multinational agencies and 22 Caribbean states...
...But no trumpets blare louder than those of the White House and State Department prophets of "privatization" and "market-driven development...
...Sustained and equitable development is not possible as long as the uses of the region's land, labor, and resources continue to be determined by those who hold no long-term stake in the well-being of Caribbean societies...
...But in the short-term, it is a strategy that serves well the self-interest of the wealthy...
...But they don't want to do it...
...4) strong state intervention...
...Political upheaval can be contained only by ever-greater authoritarianism and repression, and ultimately, by military force...
...By depressing wages and living standards and reducing social services, it undermines the well-being and productive capacity upon which the development potential of "adjusting" nations depends...
...Economic pressures force more women to enter the formal labor force at a time when reduction of social services increases the need for the non-paid but essential work traditionally done by women...
...The terms and conditions of key loan agreements are often kept secret...
...Most of those who remain will have to work harder and longer for less, while many more will have little choice but to leave their homes, to join the swelling ranks of displaced Third World people struggling to survive in the cold economic climates of the United States and Europe...
...Certain adjustment requirements, such as providing infrastructure for private investors, actually increase the need to borrow dollars...
...If millions more are forced to leave their homelands, or to remain there only to serve the desires of the world's wealthy for exotic foods, low-priced electronics, and vacation retreats, that is of no concern to them...
...Although a program for enhancing agricultural production, trade, and self-reliance in the region was developed by CARICOM in 1983, neither Robinson nor Christian del Voie, who was World Bank program director for the Caribbean when interviewed in 1988, had even read it...
...There's nothing new in that...
...Because of its own economic crisis, the United States has the greatest stake in the continued transfer of re- sources out of Asia, Africa, and Latin America to the transnational banks and corporations in which U.S...
...Neville Duncan of the University of the West Indies maintains that "For real development, we need a wide redistribution of assets, not short-term welfare...
...The World Bank's Jamaica economist agreed: "Look at an island, say, like Montserrat, or the others...
...Bank profits from Third World lending have never been higher...
...At the same time, shoppers in urban areas of Barbados and Trinidad find that the root crops and fruit from nearby islands are becoming more scarce and expensive...
...Other than that, their best shot is tourism...
...Acting on their behalf, multilateral lending agencies devised "structural adjustment," a development strategy which requires governments to cut social spending, sell off public resources, offer incentives to foreign investors and increase their exports...
...5 (FEBRUARY 1990) 15The Caribbean bean less costly to investors...
...Export-centered policies create disincentives for food self-reliance at every point in the system of production and distribution...
...Social benefits, in the words of one World Bank official, "are totally dependent on growth...
...Even when we know the operations or imports will probably destroy local industries, we're expected to let them in, because nobody wants to be accused of turning away anything that creates jobs, even bad jobs...
...But the very policies which the U.S...
...and Guyana on the South American mainland...
...and 5) largescale U.S...
...it started with colonialism and slavery...
...Because of its own economic crisis, the United States has the greatest stake in the continued transfer of resources out of Asia, Africa, and Latin America to the transnational banks and corporations in which U.S...
...The U.S...
...So if we try to follow this model, the result will be more control from the outside, more extraction of wealth, more unemployment, and the sort of development that forgets about people...
...The opportunity for food self-reliance in the English-speaking Caribbean is greater today, says Demas, because the elimination of trade barriers among CARICOM member states in 1989 encourages regional trade and cooperation...
...Woods claims that the least developed countries need to achieve and maintain a 5.4% per capita compound annual growth rate in order to stand a chance of catching up with the industrialized nations, which, Woods predicts optimistically, will continue to grow at a rate of 2.6% yearly...
...Both institutions have gone to great lengths to convince governments and policy makers that the damage done to children, women, and the poor in general can be mitigated, and that structural adjustment, by creating the conditions for growth and future prosperity, will benefit the poor in the long run...
...Says Adrian Fraser, Coordinator of CARIPEDA, a network of development agencies in the English-speaking Caribbean, "We export what we produce and import what we consume...
...There's nothing new in that...
...6. World Bank economist Roger Robinson says "Structural adjustment is essential because it relieves tremendous aggregate demand pressure...
...Other than that, their best shot is tourism...
...However, he maintains, "...free intra-regional trade will only be feasible if regional producers are protected to a reasonable extent from extraregional impos.3 But structural adjustment requirements stand in the way...
...Structural adjustment is the state-of-the-art version of the free-market, export-oriented, private sector-led development model...
...government also helps enforce structural adjustment directly through the programs of AID and trade policies such as the Caribbean Basin Initiative (CBI...
...Vincent, observed agronomist Glenroy Browne, "You see many people sitting by the roadside, waiting for the mail van that they hope will bring that check from their relatives working abroad, because that is all they have to sustain them...
...In rural St...
...If their governments could be persuaded to sell land for retirement homes for wealthy Americans, the place could be another Monte Carlo...
...Barbados, which lies east of the Windwards...
...In their desperation to obtain hard currency from exports despite lower prices, indebted governments worldwide are inviting investors to fell more forests, mine more mountains, drain more wetlands, and replace more local food crops with export crops...
...1989...
...It is conveyed by a corps of callous, de-nationalized technocrats, whose only allegiance is to their lucrative careers in the institutions they serve...
...Since the advent of the global debt crisis, U.S...
...Vincent and the Grenadines...
...The Banks's goal is to make sure the lines of credit, the incentives, and the pricing policies are right...
...The arm-twisting that takes place at World Bank and IMF meetings is hidden behind a public facade of jovial diplomacy and consensus among equals...
...Thus, structural adjustment policies are contributing not only to increased poverty and hunger, but also to the environmental debacle which threatens the entire planet...
...While not bound by CGCED decisions, AID is an active participant and increasingly coordinates its policies with those of other leading CGCED members...
...Other elements can be found in traditional farming methods and in the practical activities of nongovernmental organizations and of farmers adapting to changing conditions...
...Acting on their behalf, multilateral lending agencies devised "structural adjustment," a develop- ment strategy which requires governments to cut social spending, sell off public resources, offer incentives to foreign investors and increase their exports...
...The Caribbean is the only area of the world, thus far, where adjustment programs are being orchestrated by a regional body--the Caribbean Group for Cooperation in Economic Development (CGCED)-led by the IMF and the World Bank, and including more than 30 government and multinational agencies and 22 Caribbean states...
...Such neocolonial attitudes are common among offi- cials of AID, the World Bank, and the International Monetary Fund (IMF), who exercise more control over the prospects for Caribbean development than do the region's governments...
...It is based on the delusion-or the REPORT ON THE AMERICAS 14pretense that poor nations can work their way out of debt and dependency by continuing and intensifying their role as providers of cheap labor, food, and raw materials to the industrialized nations...
...2. This does not include illegal capital flight and other hard-tomeasure losses...
...Thus, it contains the seeds of its own destruction...
...The Aid Scam 1. Author's interview, Bridgetown, Barbados, Feb...
...In the view of some World Bank officials, this is not a problem, but rather part of the solution...
...agencies...
...Under such conditions, economic growth can only take place at the expense of the majority of the region's citizens...
...Typical of the way Bank officials evade talking about people, he means that reducing people's real incomes, ability to purchase imported goods, and access to services saves foreign exchange and money for the state...
...author's Interview, June 1988, Washington, DC...
...2 Would-be "developing countries" worldwide paid out $187 billion in 1988 just to meet debt obligations...
...In fact, a major goal of the World Bank's social programs is to reduce the cost of social services by "rationalizing" them: getting the poor to pay more of the costs of clinic visits, school books and other services, and giving the private sector a piece of the social service business.5 Nowhere have such compensatory programs been implemented successfully...
...When the need for quick cash drives "development" decisions, it virtually ensures that resources will not be used in the long-term interests of Caribbean people or their environment...
...This scenario is already unfolding in the Caribbean...
...The ones [Montserrat citizensi who stay would have higher incomes...
...The Caribbean has paid out substantially more than it has received in financial resources since 1986, when an estimated $100 million flowed to foreign lenders...
...Feasibility studies and field tests for producing and processing more local foods, meanwhile, gather dust on the shelf...
...Thus, structural adjustment policies are contributing not only to increased poverty and hunger, but also to the environmental debacle which threatens the entire planet...
...satellite television and movies promote North American foods, fashions and consumption-centered lifestyle, increasing the desire for what dollars can buy...
...It is conveyed by a corps of callous, de-nationalized technocrats, whose only allegiance is to their lucrative careers in the institutions they serve...
...Certain adjustment requirements, such as providing infrastructure for private investors, actually increase the need to borrow dollars...
...They are in no way intended to redistribute resources from the wealthy...
...3 Structural adjustment is designed and implemented primarily by the World Bank, the IMF, and other international "development" banks, in close collaboration with wealthy country governments and commercial banks...
...Far from helping poor nations to increase their export earnings, adjustment undermines the prices of their commodity exports by pitting exporting nations against each other...
...Largely in order to serve Japan's needs for food, fiber and manufactured goods, the Japanese promoted increased farm productivity and a modernized infrastructure...
...Both institutions have gone to great lengths to convince governments and policy makers that the damage done to children, women, and the poor in general can be mitigated, and that structural adjustment, by creating the conditions for growth and future prosperity, will benefit the poor in the long run.4 In addition, the World Bank now promotes compensatory social welfare programs to cushion the impact of austerity, in the hope that wealthy governments and private aid agencies will step in to clean up the social wreckage left in the wake of structural adjustment...
...J AMAICA WAS AMONG THE FIRST TO ACCEPT economic and social re-programming by the sponsors of adjustment...
...and European governments, corporations and banks have used the region's indebtedness to speed the removal of resources from what they still regard as their waterfront properties...
...Trinidad and Tobago off the coast of Venezuela...
...This so-called development strategy steers desperately needed capital, minerals, land, and labor away from production for local needs and toward debt payments and exports...
...Far from helping poor nations to increase their export earnings, adjustment undermines the prices of their commodity exports by pitting exporting nations against each other...
...Such measures open markets and resources to corporations from Europe, Japan, and North America, which are subsidized and protected by the very sort of policies forbidden under the terms of structural adjustment to the governments of indebted nations...
...Ibid...
...Women in Grenada who were encouraged to grow cabbages and carrots find markets flooded because of lack of planning for staggered planting and varied crops...
...In practice, structural adjustment weakens economies, re- ducing even their capacity to sustain their own populations...
...This secrecy helps Caribbean governments preserve the illusion that it is they, and not their creditors, who set policies for their nations...
...Since the advent of the global debt crisis, U.S...
...Vincent and the Grenadines...
...This includes the more commonly recognized, although extremely under- valued, tasks such as household maintenance and care of children and the elderly, as well as production of subsistence and export crops...
...These are intended as temporary, stop-gap measures to ease social tensions until "market-driven" growth produces prosperity that will trickle down to the poor...
...Caribbean Development Bank, Report to the Caribbean Groupsfor Cooperation in Economic Development, June 1988...
...Strengthening agriculture was a government priority under Japanese colonialism during the first half of this century, and later in the years following World War II, in both Taiwan and South Korea...
...the Leeward Islands of Antigua/Barbuda, St...
...3) close linkages between farming and manufacturing...
...This, he adds, is the purpose of the conditionalities appended to adjustment loans...
...The U.S...
...ambassador to Jamaica, William Holden, proclaimed that his mission was "to silence the trumpets of socialism" in the Caribbean...
...It is based on the delusion or the 14 REPORT ON THE AMERICAS The Caribbean THE AID SCAM Women sugarworkers in Trelawny Parish, Jamaica: Foreign banks netted $100 million from the Caribbean in 1986 S NE OFFICIAL OF THE U.S...
...4 Caribbean grassroots organizations, especially movements representing low-income and working women, have become vocal and articulate critics not only of the devastating impact of adjustment-related austerity on the poor, but also of the undermining of development potential they entail...
...World Bank policies require us io follow free trade," Demas notes, "[yet] three-quarters of the European Economic Community Budget goes into agricultural subsidies for their own products...
...Author's interview, June 1988, Washington...
...5. International Monetary Fund, Helping the Poor: the IMF's New Facilities for Structural Adjustment, (1988) and Tony Addison and Lionel Demery, Alleviating Poverty under Structural Adjustment, (Washington: The World Bank, 1987) are among numerous Fund and Bank publications that attempt to address this issue...
...Migration in search of employment has long been part of the pattern of Caribbean life, but high unemployment, the decline of food production for local needs, and rising land prices all exacerbated by structural adjustment policies have accelerated the loss of talents and skills...
...Available packages of fertilizers and pesticides are geared to export crops, as are the interests and knowledge of agricultural extension personnel a problem compounded by the fact that the farmers who grow non-export crops are mostly poor and/or female and often face discrimination...
...In the view of the World Bank, the Caribbean exists as a mere appendage of the industrialized capitalist economies...
...We don't have a private sector of our own capable of promoting growth...
...But governmental crisis-reaction policies that promote increased exports at any cost are blocking their prospects for success...
...5 Atherton Martin, a development analyst and activist from Dominica, looks to people-centered Caribbean institutions credit associations, trade unions, farmers organizations, cooperatives, community groups, and nongovernmental development organizations as the mos important part of the solution to the Caribbean's economic crisis...
...Says Adrian Fraser, Coordinator of CARIPEDA, a network of development agencies in the English-speaking Caribbean, "We export what we produce and import what we consume...
...They regard the land as some sort of birth right...
...Like their colonialist predeces- sors, today's brokers of development "aid" view countries not as the homes of people with needs and ideas, not as societies with histories and destinies, but rather as sources of so many tons of bauxite, so many board-feet of timber, so many shiploads of fruit, or increasingly so many millions worth of gadgets and garments for export...
...Vincent and the Grenadines...
...The World Bank hasn't done studies on the potential for import substitution in the Caribbean," says Robinson, because "All the potential for growth is external and market-led...
...Communities that once raised sheep, goats, and cattle have planted bananas on most of their former pasture, and eat expensive imported frozen chicken when they can afford meat at all...
...In their desperation to obtain hard currency from exports despite lower prices, indebted governments world- wide are inviting investors to fell more forests, mine more mountains, drain more wetlands, and replace more local food crops with export crops...
...What we are facing is a new form of an old problem," says Cecil Ryan, program coordinator for Projects Promotion, a nongovernmental development agency in St...
...ambassador to Jamaica, William Holden, proclaimed that his mission was "to silence the trumpets of socialism" in the Caribbean...
...Kitts/Nevis...
...9. Remarks at NGO country consultation on U.S...
...4 In addition, the World Bank now promotes compensatory social welfare programs to cushion the impact of austerity, in the hope that wealthy governments and private aid agencies will step in to clean up the social wreckage left in the wake of structural adjustment...
...Vincent Farmers Union General Secretary Earlene Home, "Slavery has ended, but we still depend on external masters to buy our few crops...
...No drum is banged with more vigor than that of U.S.-backed "democracy," endlessly invoked as the goal of these policies...
...Bank profits from Third World lending have never been higher...
...as of 1988, it had received more funds per capita in World Bank structural adjustment lending than any other country in the world...
...In the Bank's view, better education, health and community services will be possible in the future if the "adjusted" economies grow fast enough to work their way out of debt, and then generate a surplus which can be tapped to address social needs.6 In the meantime, AID and the World Bank agree, the priority for public spending must be not to address poverty, but rather to assist the private sector...
...In the view of many Caribbean observers, the extent of control by the World Bank, IMF and other lenders and donors over the economic options of Caribbean states represents a new stage in a process of recolonization...
...4 World Bank economist Roger Robinson scoffs at the notion that Caribbean countries ought to be permitted to nurture and protect their own food-producing capacity...
...The independent nations of the English-speaking Eastern Caribbean include: the Windward Islands of Dominica, Grenada, St...
...In his view, "Our task is to broaden our horizons, and to widen our people's view of what is possible, and to expand our nations' visions of themselves...
...Author's interview, June, 1988, Washington...
...AID grants and loans to support export enterprises increase these subsidies to the private sector by adding funds from U.S...
...In the Bank's view, better education, health and community services will be possible in the future if the "adjusted" economies grow fast enough to work their way out of debt, and then generate a surplus which can be tapped to address social needs.' In the meantime, AID and the World Bank agree, the priority for public spending must be not to address poverty, but rather to assist the private sector...
...Such measures open markets and resources to corporations from Europe, Japan, and North America, which are subsidized and protected by the very sort of policies forbidden under the terms of structural adjustment to the governments of indebted nations...
...Vincent and the Grenadines, March, 1988...
...In Taiwan and South Korea, the most successful Asian NICs, five factors were essential ingredients in the growth of industry: 1) food self-sufficiency...
...The Leeward Islands of Montserrat and Anguilla remain under British rule...
...As a consequence, the Caribbean now imports most of its marketed food...
...The experts who concocted the structural adjustment remedy believed at least in the beginning that it would stimulate productive investment and economic growth...
...Structural adjustment is the state-of-the-art version of the free-market, export-oriented, private sector-led development model...
...it started with colonialism and slavery...
...to walk to their fields, work hard all day long, and their only reward is old age...
...These deprive countries of what little control over their economies they had retained, by forcing them to drop or reduce import quotas, export tariffs, corporate taxes, foreign exchange controls, and other barriers to international "free trade...
...Author's interview, December 1989, St...
...No drum is banged with more vigor than that of U.S.-backed "democracy," endlessly invoked as the goal of these policies...
...capital still plays a primary role...
...None of these are contemplated in the strict external market-driven development strategy advocated for the Caribbean by the multilateral lenders and official U.S...
...TRUCTURAL ADJUSTMENT POLICIES DO NOT alter the underlying structures that keep Caribbean societies dependent and poor...
...Otherwise, they'll destroy investor confidence...
...From the point of view of the powerful international lending agencies and foreign governments, the Caribbean does not really belong to the Caribbean people...
...According to the Reagan Administration's AID chief Donald Woods, low-income countries must "make the economic choice" to grow at a rate more than twice that predicted by AID for the industrialized nations in the coming decade...
...This scenario is already unfolding in the Caribbean...
...They are in no way intended to redistribute resources from the wealthy...
...Such neocolonial attitudes are common among officials of AID, the World Bank, and the International Monetary Fund (IMF), who exercise more control over the prospects for Caribbean development than do the region's governments...
...U.S.AID, 1989 Congressional Presentation...
...Michael's, Barba14...
...The best way to solve their problems is to subsidize their exports and allow the people to emigrate...
...MUCH OF THE GROUNDWORK FOR DEVELoping new technologies and more self-reliant food systems has already been done by regional institutions such as the Caribbean Economic Community (CARlCOM), the University of the West Indies, and the Caribbean Food and Nutrition Institute...
...Cultivation of steep hillsides and watersheds causes erosion of fragile soils...
...capital still plays a primary role...
...In fact, a major goal of the World Bank's social programs is to reduce the cost of social services by "rationalizing" them: getting the poor to pay more of the costs of clinic visits, school books and other services, and giving the private sector a piece of the social service business.' FOLLOW THE NICS...
...AMAICA WAS AMONG THE FIRST TO ACCEPT economic and social re-programming by the sponsors of adjustment...
...That's up to the individual businessman...
...For example, he said, Grenadian officials are under pressure to waive regulations limiting the freedom of foreign firms to set up packaging and processing operations...
...At rural stores in St...
...Others who have access to land to till get up at 4a.m...
...While the United States, the world's biggest debtor, continues to drift on a rising tide of red ink, Caribbean countries are threatened with the cut-off or drastic reduction of loans, credit to buy essential imports, and even food aid, should they fail to implement adjustment programs...
...It might be OK to use some local materials for packaging, but they [the Caribbean countries] shouldn't be producing iron and steel, certainly...
...According to their theory, this would enable indebted countries to climb the economic hierarchy of nations...
...In essence, the Agency is advocating greater subsidization of business, especially foreign firms, by Caribbean taxpayers and workers...
...They regard the land as some sort of birth right...
...1988...
...CGCED, World Bank, IMF, and most AU) programming and policy decisions are made behind closed doors...
...The pressure to increase production of export crops and the lack of income alternatives compel farmers to employ agricultural practices that undermine the long- term productivity of the land...
...C ONTINUED RESISTANCE BY THE POOR AND their allies to adjustment austerity policies has forced the World Bank and IMF to acknowledge that the burden of adjustment has fallen upon those least able to bear it...
...and European governments, corporations and banks have used the region's indebtedness to speed the removal of resources from what they still regard as their waterfront properties...
...Now international capital is being used to extract value from the Caribbean through regional institutions, and our own governments are cooperating more in going along with it...
...3 A senior civil servant in the government of Grenada said that with World Bank experts, LMF economic inspectors, and AID consultants looking over their shoulders, Grenadian officials are repeatedly forced to make decisions that violate CAR ICOM guidelines for regional cooperation, decisions that they know are detrimental to the economy of the country and the region...
...Vincent and the Grenadines...
...In practice, structural adjustment weakens economies, reducing even their capacity to sustain their own populations...
...But to comply with World Bank advice to "follow the NICs," Caribbean nations would have to break nearly every policy prescription the Bank, the IMF and AID have tried to impose...
...That philosophy is what keeps us in debt and puts blinders on our people and on our Caribbean governments, which vacillate between the practical necessity and possibility of developing our own resources, and blind allegiance to the ideology of private enterprise...
...dos...
...Guyana, the Dominican Republic, Trinidad and Tobago, Barbados and the Windward Islands are all under pressure to "adjust...
...The role of AID and the World Bank is just the opposite: to narrow our sense of what is possible, to convince us if we need a factory, we must pay a foreign company to build it...
...AID grants and loans to support export enterprises increase these subsidies to the private sector by adding funds from U.S...
...8. Author's interviews, November1987, Bridgetown, Barbados, and March 1988, Kingstown, St...
...In the view of many Caribbean observers, the extent of control by the World Bank, IMF and other lenders and donors over the economic options of Caribbean states represents a new stage in a process of recolonization.4 Caribbean grassroots organizations, especially movements representing low-income and working women, have become vocal and articulate critics not only of the devastating impact of adjustment-related austerity on the poor, but also of the undermining of development potential they entail...
...When the World Bank commissions studies and projects in connection with structural adjustment programs, the relevant documents are made available to consultants and bidders for the contracts, but not to the Caribbean citizens whose futures will be affected...
...Largely as a result of adjustment and related policies, at least $50 billion in capital is transferred yearly out of the Third World...
...model we're being told to follow now-relying solely on a free-market strategy and support for the private sector-leaves those structures in place...
...Farmers can get loans more easily for export crops than for traditional staple foods...
...These deprive countries of what little control over their economies they had retained, by forcing them to drop or reduce import quotas, export tariffs, corporate taxes, foreign exchange controls, and other barriers to international "free trade...
...7 If current versions of structural adjustment do not transform poverty-creating structures and patterns of trade, REPORT ON THE AMERICAS R"e4 oCa AeI44CA4 The Caribbean bean less costly to investors...
...While not bound by CGCED decisions, AID is an active participant and increasingly coordinates its policies with those of other leading CGCED members...
...Plans now under discussion would speed the extraction of timber from the region's few remaining virgin forests, and divert waterways to produce power mainly for export industries...
...Geest Industries, which controls much of the Windward Islands' produce exports, profits more from the farm inputs and consumer and capital goods it brings to the islands in its gleaming fleet of banana boats than from the produce it takes out...
...In order to make up for these "comparative disadvantages," AID is pressing govern- ments to make private industrial enterprises in the CaribVOLUME XXIII, NO.5 (FEBRUARY 1990) 15 pretense-that poor nations can work their way out of debt and dependency by continuing and intensifying their role as providers of cheap labor, food, and raw materials to the industrialized nations...
...government also helps enforce structural adjustment directly through the programs of AID and trade policies such as the Caribbean Basin Initiative (CBI...
...But the very policies which the U.S...
...But in the short-term, it is a strategy that serves well the self-interest of the wealthy...
...3. UNICEF, State of the World's Children, Dec...
...Thus, it contains the seeds of its own destruction...
...It opens the Third World to further penetration by transnational capital and recycles hard currency to the United States, Europe and Japan...
...and multilateral policies in St...
...The experts who concocted the structural adjustment remedy believed-at least in the beginning-that it would stimulate productive investment and economic growth...
...Vincent, villagers can buy imported macaroni and canned beef but not locally-grown beans or tannias, another root crop...
...taxpayers...
...In Dominica, for example, farmers can get truck transport for the more profitable export cargo of bananas much more easily than for root crops and vegetables...
...as of 1988, it had received more funds per capita in World Bank structural adjustment lending than any other country in the world...
...We have no idea of the particulars of what will sell in the United States and other external markets," says del Voie...
...It requires the poor to work harder and consume less to help their countries earn foreign exchange to pay their debts...
...In order to make up for these "comparative disadvantages," AID is pressing governments to make private industrial enterprises in the CaribVOLUME XXIII, NO...
...Nowhere have such compensatory programs been implemented successfully...
...It opens the Third World to further penetration by transnational capital and recycles hard currency to the United States, Europe and Japan...
...Instead, we should produce a variety of crops, process them ourselves, meet our own needs first, and then sell the surplus.' ' Throughout the Caribbean, scholars, community leaders, and grassroots organizations are pursuing these and other ideas for self-reliant development...
...AID recognizes that the international competitiveness of Caribbean exports is constrained by high production costs and the lack of demand on world markets for the region's traditional exports...
...The mechanisms to withdraw resources from our countries have become more sophisticated...
...taxpayers...
...But no trumpets blare louder than those of the White House and State Department prophets of "privatization" and "market-driven development...
...Real structural adjustment would help us increase our self-reliance and build the internal basic capabilities of our economies, starting with what we already have...
...The ones [Montserrat citizens] who stay would have higher incomes...
...S TRUCTURAL ADJUSTMENT POLICIES DO NOT alter the underlying structures that keep Caribbean societies dependent and poor...
...Political upheaval can be contained only by ever-greater authoritarianism and repression, and ultimately, by military force...
...if we need flour, we must import it...
...CONTINUED RESISTANCE BY THE POOR AND their allies to adjustment austerity policies has forced the World Bank and IMF to acknowledge that the burden of adjustment has fallen upon those least able to bear it...
...A village that was renowned before the current banana boom for its high quality dasheen, an edible root, now produces almost none for sale...
...When farmers do produce food for local or regional sale, they frequently cannot recover their costs, in part because adequate facilities for efficient transport, storage, processing and packaging of food for local and regional sale simply do not exist...
...It is unlikely that they could be, since the intentional lowering of incomes is central to structural adjustment strategy: To "succeed," it necessarily causes the immediate worsening of poverty...
...The United States still retains the greatest power over global capital and credit flows, and is the dominant member nation of both the IMP and the World Bank, although Japan now nips at its heels...
...Real development has to start with people...
...Barriers to protect local food don't make sense for anybody," he says...
...The best way to solve their problems is to subsidize their exports and allow the people to emigrate...
...It's just not viable to produce tires or shoes [for local and regional markets] in the Caribbean...
...model we're being told to follow now relying solely on a free-market strategy and support for the private sector leaves those structures in place...
...In the Caribbean, agriculture, especially on small farms, has been neglected for most of the twentieth century...
...government dictates in the name of freedom are creating increased poverty and, consequently, social chaos and unrest...
...The greatly increased use of agricultural chemicals depletes soil fertility and creates dangerous hazards for present and future generations...
...9 Increased dependency on imported food and consumer goods raises the need for cash, while U.S...
...Newly-appointed U.S...
...It is carried Out in alliance with the ruling elites of poor nations, many of whom despite their once-patriotic intentions have become entrapped in the IMF honey pot...
...They need markets in the United States, and so they can't restrict the repatriation of profits [by foreign corporations] and they have to keep up their incentives to investors...
...According to respected Caribbean economist and former president of the Caribbean Development Bank, William G. Demas, the Caribbean could produce a far greater proportion of its own food...
...These are intended as temporary, stop-gap measures to ease social tensions until "market-driven" growth produces prosperity that will trickle down to the poor...
...7. Statement to visiting group of U.S...
...It also includes the less quantifiable contributions by women to sustaining the institutions and traditions mutual aid societies, churches, holiday customs, and other activities from festival to funerals that give meaning and cohesion to Caribbean community life...
...The World Bank's Jamaica economist agreed: "Look at an island, say, like Montserrat, or the others...
...citizens, March 1988, Kingstown, St...
...William G. Demas, "Agricultural Diversification in the Caribbean Community," (Grand Anse, Grenada, May 1987...
...While the United States, the world's biggest debtor, continues to drift on a rising tide of red ink, Caribbean countries are threatened with the cut-off or drastic reduction of loans, credit to buy essential imports, and even food aid, should they fail to implement adjustment programs...
...Newly-appointed U.S...
...All these factors encourage young adults, potentially the most productive members of society, to move from rural to urban areas, and from their countries of birth to the United States, Canada or England...
...It requires the poor to work harder and consume less to help their countries earn foreign exchange to pay their debts...
...Like their colonialist predecessors, today's brokers of development "aid" view countries not as the homes of people with needs and ideas, not as societies with histories and destinies, but rather as sources of so many tons of bauxite, so many board-feet of timber, so many shiploads of fruit, or-increasingly-so many millions worth of gadgets and garments for export...
...So if we try to follow this model, the result will be more control from the outside, more extraction of wealth, more unemployment, and the sort of development that forgets about people...
...If their governments could be persuaded to sell land for retirement homes for wealthy Americans, the place could be another Monte Carlo...
...George's, Grenada...
...T HE SPONSORS OF STRUCTURAL ADJUSTMENT like to hold up the success of the "Newly Industrialized Countries" of South Korea, Taiwan, Singapore and Hong Kong as models for the Caribbean...
...Says St...
...Author's interview, March, 1988, Kingstown, St...
Vol. 23 • February 1990 • No. 5
